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Page last updated at 00:30 GMT, Tuesday, 30 June 2009 01:30 UK

Merkel pledges to ditch coalition

Germany's Chancellor Angela Merkel
Chancellor Merkel says growth comes before a balanced budget

Germany's Chancellor Angela Merkel has launched her party's manifesto for September elections, saying she hopes to jettison her coalition partner.

Her conservative CDU have ruled in a grand coalition with the centre-left Social Democrats (SPD) for four years.

But despite Germany facing a deep recession, she said she hoped to do well enough to take on a new partner.

Tax cuts form the centrepiece of her manifesto - a stance condemned by the SPD as a "tax gift" giveaway.

The plan includes cutting the lowest income tax rate from 14% to 12%, and raising the threshold at which people pay the top rate, 45%, from 52,000 euros to 60,000 euros (£51,000). It has been estimated that it could cost Germany 15 billion euros.

At a conference of the CDU and its Bavarian ally, the CSU, Mrs Merkel defended her handling of the economic crisis, which was opponents say was ponderous.

"We did it differently, we thought about it, we were smart," she said.

She insisted that setting Germany back on the road to growth was more important than making sure it balanced its budget.

The government has forecast that GDP will fall 6% this year, while budget deficit is expected to soar.

Finance Minister Peer Steinbrueck, from the SPD, has called the deficit monstrous".

'Unrealistic' plan

Mrs Merkel told more than 700 delegates in Berlin: "We have the power to make our country stronger than it was before. We have the power to promote growth... and we can best do this with another coalition partner."

Mrs Merkel hopes to get enough votes to replace the SPD with the pro-market Free Democrats (FDP).

The chancellor remains popular, and the SPD did poorly at recent European elections, but opinion polls suggest the CDU and FDP may not be able to garner enough votes to work together.

The SPD criticised Mrs Merkel's tax plan as "completely unrealistic."

The CDU "are not telling the people how they will finance" their tax plans, said SPD Secretary-General Hubertus Heil, saying it would require "massive cuts" in public services.



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